Editorial: Time is now for Cal Am's desal plan

If California American Water goes it alone to build a desalination plant of its own near Marina or anywhere else, it should be required to make the project similar to the long-discussed regional desalination project that also involved Monterey County and the Marina water district — and to get a move on.

With the possible exception of downsizing, dramatic changes in design and approach would almost certainly draw out the approval process and require another full environmental impact report — which, for practical purposes, could mean another environmental impact report after that.

A Cal Am official told a Public Utilities Commission judge this week that the company hopes to simply modify the PUC's existing approval of the seemingly defunct regional project to expedite the process. Cal Am wanted 90 days to come back with a new plan, but was told to return by March 1. That is a positive sign from the PUC, because Cal Am faces a state order to start reducing the use of Carmel River water, the Peninsula's primary supply, by 2016. The need to find or create an alternate suppy becomes more urgent with each passing day.

The future of desalination here is in question because of a dizzying combination of factors, including lack of a financing plan, a court order requiring a new environmental impact report, a legal dispute about water rights, a criminal case and state investigation about conflict of interest allegations and fracturing of a three-way partnership that had been heading the regional project.

One partner, Monterey County, is eager to get out and stay out of the process but the other, the Marina Coast Water District, is fighting legally, politically and administratively to remain attached. If the regional desalination project is finished, Marina Coast gets a large supply of cut-rate water that could be used for significant development at Fort Ord. If it isn't completed, Marina Coast stands to lose millions of dollars that it has already sunk into the process.

In formal arguments filed with the PUC in advance of Tuesday's status hearing, Marina Coast lawyers argued that Cal Am has selfish motives to end the partnership.

Cal Am's effort "appears calculated not to benefit Cal Am's ratepayers but to benefit its bottom line," said Marina Coast's legal brief. "Instead of providing desalinated water at cost from (Marina Coast) under the regional desalination project, the...alternative would add some $300 million of desalination plant assets to Cal Am's rate base. Cal Am would then be in a position to earn a return of more than 10 per cent from its ratepayers on an annual basis on those additional rate base assets."

Complicating Cal Am's current plan, a Monterey County ordinance requires desalination plants to be publicly owned. Cal Am's expressed approach to that obstacle is to persuade the county to drop the ordinance or to persuade a judge or jury to order it dropped.

Rather than spending time and ratepayer money on more political and legal battles, Cal Am should be looking for the most expeditious, most efficent ways to solve the Peninsula's water woes and ward off the state's cutoff order. It has all become so complicated that the most direct route may not be the most obvious one, but the PUC has the power and it should have the expertise to make sure Cal Am stays on the best path — the best path for the Peninsula and not just for its shareholders.